The Federal Treasurer’s plan to establish targets for economic growth at this weekend’s meeting of finance ministers and central bankers from the Group of 20 nations is not without its merits. However a one-size-fits-all approach ignores key complex factors.
This is the view of Griffith University professor of economics, Fabrizio Carmignani, who argues that quality of growth and its influence on socioeconomic outcomes is more important than the type of growth proposed by Treasurer Joe Hockey.
“What Hockey has in mind is a type of growth that would probably match the objectives of a private business. But governments are not private businesses,” Professor Carmignani said.
“It is hard to dictate the reform agenda to the G20 countries starting from a rather narrow national perspective, as the treasurer seems to be doing.
“While growth is of critical importance, it is just a tool to reach some greater good, and what is achievable in terms of growth targets varies across the G20 countries.
“The G20 is probably better off without a target on growth. However, this does not mean that growth should not be a major concern this weekend in Sydney.”
Professor Carmignani gave Mr Hockey’s plan a tick of approval for potentially triggering a welcome change in the G20’s method of operation.
“No longer would the G20 just discuss economic policy, but it would have to make a commitment on specific economic outcomes.”